A decrease in the unit prices for
bituminous concrete, common excavation, and structural steel
lowered the index in the fourth quarter. There were increases in
the unit prices for portland cement concrete, structural
concrete, and reinforcing steel.

The three-quarter moving
composite price index for the third quarter of 1998obtained
by combining data for the first three quarters of
1998increased 3.8 percent from the previous three-quarter
average.

Trends in highway construction
costs are measured by an index of average contract prices
compiled from reports of state highway contract awards for
federal-aid contracts greater than $500,000. Since the enactment
of the Intermodal Surface Transportation Efficiency Act of 1991,
the index reflects federal-aid contracts on the National Highway
System.

The composite price indices
during the past two years and the percentage changes from the
preceding quarter have been as follows:

Quarter

Year

Quarterly Price Index

Percentage Change

Three-quarter Moving Index1

Percentage Change

4th Quarter1

1996 1995

119.5

--

125.6

--

1st Quarter
Quarter

1997

133.6

11.8

127.7

1.7

2nd Quarter
Quarter

1997

130.4

-2.4

129.3

1.3

3rd Quarter
2nd Quarter

1997

122.3

-6.2

129.4

0.1

4th Quarter
Quarter

1997

138.2

13.0

124.7

-3.6

1st Quarter
Quarter

1998

119.6

-13.5

124.6

-0.1

2nd Quarter
Quarter

1998

125.6

5.0

125.8

1.0

3rd Quarter

1998

136.8

8.9

125.8

130.6

3.8

4th Quarter

1998

131.4

-3.9

--

--

1For the three-quarter moving
index, these are the middle quarters of the three-quarter
periods.

The price levels of the component items of the quarterly
index in the 4th quarter of 1998, the previous quarter, and the
same quarter a year ago, and the corresponding percentage
changes, are shown in the following table:

Price Index

1987 = 100

Percentage change

this quarter

(4th quarter, 1998)
from:

Component

4th Quarter 1998

3rd Quarter 1998

4th Quarter 1997

3rd Quarter 1998

4th Quarter 1997

Excavation

114.1

136.6

102.7

-16.5

11.1

Portland
cement concrete

170.8

160.6

192.5

6.4

-11.3

Bituminous
concrete

104.7

132.9

126.4

-21.2

-17.2

Composite surfacing

126.4

142.0

148.1

-11.0

-14.7

Reinforcing
steel

133.5

100.7

124.7

32.6

7.1

Structural
steel

125.8

130.3

171.9

-3.5

-26.8

Structural
concrete

152.0

142.1

131.9

7.0

15.2

Composite structures

141.9

131.9

141.2

7.6

0.5

Composite
price index

131.4

136.8

138.2

-3.9

-4.9

The price levels of the current
component items of the three-quarter moving index in the
3rd quarter of 1998, the previous quarter, and the same quarter a
year ago, and the corresponding percentage changes, are shown in
the following table:

Three-Quarter Moving Price Index

1987 = 100

Percentage Change This Quarter

(3rd Quarter 1998) from:

Component

3rd Quarter 1998

2nd Quarter 1998

3rd Quarter 1997

2nd Quarter 1998

3rd Quarter 1997

Excavation

124.6

127.7

120.4

-2.4

3.5

Portland
cement concrete

161.2

157.4

166.9

2.4

-3.4

Bituminous
concrete

117.0

100.4

116.2

16.5

0.7

Composite surfacing

131.5

119.2

132.8

1.9

-8.5

Reinforcing
steel

116.1

120.9

126.9

-4.0

-8.5

Structural
steel

123.5

125.4

135.4

-1.5

-8.8

Structural
concrete

140.2

137.3

126.9

2.1

10.5

Composite structures

131.7

131.4

129.2

0.2

1.9

Composite
price index

130.6

125.8

129.4

3.8

0.9

The U.S. average contract unit prices for the
index items during the various periods shown are:

Individual Quarters

Three-Quarters

Component

Unit

3rd Quarter 1998

4th Quarter 1998

2nd Quarter 19981

3rd Quarter 19982

Excavation

Cubic
yard

3.31

2.77

$3.10

3.02

Portland
cement concrete

Square
yard3

23.66

25.16

23.19

23.75

Bituminous
concrete

Ton

32.77

25.80

24.76

28.85

Reinforcing
steel

Pound

0.444

0.588

0.533

0.512

Structural
steel

Pound

1.153

1.114

1.110

1.093

Structural
concrete

Cubic
yard

342.12

366.06

330.77

337.68

1 Weighted
average unit prices for the last quarter of 1997 and the first
two quarters of 1998.2 Weighted average unit prices for the
first three quarters of 1998.3 Prices for Portland cement concrete
surfacing reflect adjustments to a standard 9-inch thickness and
do not include costs for reinforcing steel and joints.